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IBM, Microsoft and other companies with lucrative government contracts pay little or no corporation tax, a Conservative MP said yesterday.

Charlie Elphicke, MP for Dover and a former tax lawyer, used parliamentary privilege to point the finger at “big-business tax avoidance on an industrial scale”.

He said in a Commons debate on corporate tax avoidance that a group of ten technology companies paid a total of £78 million in taxes in 2011 on UK earnings of £17.5 billion. According to Mr Elphicke’s estimates, their tax bill should have been £879 million — a “tax gap” of more than £800 million.